By Mary Lyn Fonua

Kacific, the broadband satellite company that rescued Tonga from its digital darkness in January 2019 when the Tonga cable was cut, is taking legal proceedings to recover a fee of USD$5.76 million it claims is owed by a Tonga government entity, Tonga Satellite Ltd.

A questionable move by the Tonga Government to deregister Tonga Satellite Ltd. from the business register after the proceedings began on 19 January 2021, failed yesterday, after Kacific Broadband Satellites International Ltd. succeeded in its civil application to the Supreme Court to have the government company restored to the register.

On June 2, Lord Chief Justice Whitten QC ordered that Tonga Satellite Limited is to be restored to the Tongan Register of Companies.

The board of TSL includes the Prime Minister and other Cabinet ministers.

“Tonga Satellite Limited shall not be removed from the Tongan Register of Companies other than by application to, and order of, this Court,” the Chief Justice ordered in granting Kacific’s application under section 338 of the Companies Act.

Arbitration to continue

Christian Patouraux, CEO and founder of Kacific, said yesterday that this milestone means that Kacific can now continue its arbitration against TSL and the Government of Tonga.

“It is deeply disappointing that Kacific has to undertake legal proceedings for payment, and that the Cabinet attempted to de-register and remove TSL from the Register of Companies after those proceedings had started.

“We are grateful that the Supreme Court has recognised this,” he said.

Kacific Broadband Satellites Group headquartered in Singapore operates a KA-band satellite service delivering broadband access to Asia Pacific. Its main operations are out of Vanuatu.

The company came to Tonga's aid [2] during the January 2019 cable outage [3] when it provided emergency broadband services to Tonga to ensure critical national services could continue. “Kacific has not been paid for providing that service,” he said.

“We came to Tonga’s aid during its hour of need. We provided assistance when asked, immediately and without hesitation,” said Mr Patouraux.

15 year agreement

He said that to protect the nation from the consequences of any future cable problems the Government entered into discussions with Kacific for the supply of satellite broadband to the Tongan people and on 9 April 2019 [4], Kacific and TSL signed a long-term agreement (known as the FSA) for the provision of satellite broadband internet in return for a single upfront payment of USD$5,760,000 due on 15 June 2019.

The satellite broadband would cover the whole of Tonga and would support the provision of e-government and e-learning services to Tongans living in remote locations and outer islands, as well as protecting the country against any disruption to its cable service for the next 15 years.

However, Kacific stated yesterday that the Tonga Government had failed to honour its commitments and the fee remains outstanding.

“Following several unsuccessful attempts by Kacific to engage with TSL and the Government of Tonga in an open and constructive way about the payment of the fee, on 19 January 2021 Kacific commenced arbitral proceedings in Singapore against TSL and the Government of Tonga to enforce payment of the debt,” said Mr Patouraux.

“Kacific negotiated with the Government of Tonga in good faith to provide affordable internet services to the nation, to safeguard the Tongan cable service and to enable connectivity for people living in remote locations.”

He noted that, “the Tongan Government has benefited from millions of dollars (USD) of payments from international aid and infrastructure agencies to fund e-government initiatives and strengthen digital access over the last 10 years.”

TSL was incorporated and registered in the Tonga Registry of Companies on 2 April 2019. Its sole shareholder is the Government of Tonga. He stated that at its formation and at the time the FSA was signed, its directors were all Ministers in the cabinet of the late Prime Minister Hon. Samuela ‘Akilisi Pōhiva, specifically Tonga’s current Prime Minister, Dr Pōhiva Tu'i'onetoa, Poasi Tei, Dr Saia Piukala, Māteni Tapueluelu and Dr Tu'i Uata. Its current directors are the Prime Minister Hon. Rev. Dr Pōhiva Tu'i'onetoa and other ministers in his cabinet.

Kacific stated that the de-registration and removal of TSL from the Register of Companies were initiated by Cabinet Decision No. 84 of 5 February 2021, a copy of which has been filed at the Supreme Court. Then on 8 February 2021, a Notice of Removal was filed by the Registrar of Companies which recorded that TSL “has ceased to carry on business”.

Interestingly, in June 2019 questions were raised in Parliament [5] about the 15-year agreement that the then Minister for Trade, Hon. Dr Tu'i Uata, had signed in Fiji on the behalf of the Tongan Government with Kacific Broadband Satellites Group to provide higher-speed connectivity for Tonga.

Matangi Tonga reported that the then Minister of Police, Hon. Mateni Tapueluelu, told parliament that Dr Uata was working on an agreement with Kacific but Government "has not formalised the agreement."

Supreme Court orders

Yesterday in ordering the restoration of TSL to the Register of Companies, Lord Chief Justice Whitten QC also ordered that Tonga Satellite Ltd. and its directors “shall forthwith comply with any provisions of the Act or any regulations of the Act, with which the company had failed to comply before it was removed from the register.”

The government is to pay the applicant's costs of application.

Counsel for Kacific is Mrs Dana Stephenson.

The Government was represented by Ms  L. Macomber with Ms 'Uta'atu.